The rise of crypto in 2016–17 brought with it large exchanges, increase in the number of traders, liquid markets and large price volatility.Volatility in bitcoin prices 2014–2019
Unlike HODLers who buy and hoping the price goes up sometime, traders love price volatility and leverage it make money.
Some of the best traders don’t even care which way the market is moving. They don’t care if the market is bullish or bearish. All they want to do is capitalize on price volatility by the old adage, buy low and sell high.Trading in the Bull market When the market is rallying all you do is HODL
When the market is going up, pretty much anything that you do will give you good returns. Traders tend to become complacent and opportunities to beat the market comes only when you are looking for dips.
For Passive traders buying and holding becomes the thing to do. The wait and try to, time market peaks during bull runs.
Active trades try and use a better strategy:Buy in steps at the end of a dip Open long term position and wait for prices to rise by 10–12% Keep trades open for multiple hours or days Close when there is some bad news or prices begin to dip Repeat
This strategy worked very well to help me grow my portfolio. Until it didn’t.
Winter of 2017 also brought in winter with crypto. Markets began to crash. Prices fell faster than they had grown. In my head, I was clear that this bull run strategy of waiting and watching was never going to work now.My experiments with trading in bear market
With the onset of bear markets, trading approach became very different. I could no longer just wait for the price to go up, if anything it went the other way around.
I initially started dabbling around on different forums, followed ‘trading gurus’ and started to look at the vast amounts...